Sam Kapcio inspects the installation of Seven Four One’s new living wall, an effort to revamp its image and consequently its place on the Laguna Beach landscape. Photo by Jody Tiongco

Fresh out of Boston’s Tufts University in 2009, history major and New York native Sam Kapcio made his way West for the first time. After exploring Southern California’s coast from San Diego through Los Angeles, he soon needed a job in order to remain in the Golden State.

Lured to Laguna Beach by a Craig’s List ad for bartenders, Kapcio considered his new job at the hotel Seven Four One an opportunity to learn the hospitality business from its then owners, Dan Sussman and Brent Eneix.

Since then, he’s also had a schooling in the city permit process, which Kapcio admits is dampening his vision for the hotel that by serendipity he has been left to realize.

Sussman and Eneix bought the rundown bed and breakfast previously known as Eiler’s Inn at 741 S. Coast Highway in December of 2007 for $3.9 million, the “peak of the hotel market,” according to hotel broker Alan Reay of Irvine’s Atlas Hospitality Group.

Six months later as the nation’s financial crisis hit its apex, the pair reopened the revamped boutique hotel with a rechristened name, but the 12-room operation proved incapable of sustaining their operating costs. Even as the recession was hurting hotel occupancy nationwide, Sussman and Eneix scrambled for an alternate business plan, and converted the place into a private hotel, specializing in events and getaways for business meetings, weddings and group vacations.

In the meantime, Kapcio took on every task. He could tend bar, organize events, welcome guests, manage activities, and even grasp the philosophy of the new business. It became his baby, though he lacked equity and apparently the authority to make changes required by city planning and code enforcement officials.

“I built the business alongside [Sussman and Eneix],” said Kapcio, now 26. “I could see that it was simple math. This was the best use of the property. It would clearly work,” he said, “if it weren’t so hamstrung,” referring to the owners’ failure to obtain approval from city officials to amend the property’s conditional use permit to allow a private hotel.

Even so, the hotel continued to operate under its new model, said Kapcio.

It also racked up 13 code enforcement violations in 2010 and 2011, which included noise offenses and serving alcohol after 11 p.m. to nonregistered guests, according to a letter from city code enforcement officer Tony Farr included in the hotel’s property file. City planners could not be reached to explain how the private hotel has been able to continue its operation without proper permits.

In a letter of complaint filed in September 2011, Russel Radach, of the neighboring Wind and Sea hotel, also informed city officials that Seven Four One was not operating as a hotel but rather as a self-described event center. Radach claimed Wind and Sea guests called police repeatedly to “quiet the revelry” going on at Seven Four One.

Sussman and Eneix ultimately lost the hotel, which was sold by the lender at a significant loss in May 2012 for $2.8 million, according to Reay. Limelight Investments LLC, whose registered agent James Tashjian of Manhattan Beach, acquired the property, the Secretary of State’s records show.

Almost immediately, Tashjian applied to amend Seven Four One’s conditional use permit, though ultimately it was withdrawn. A certificate of use filed in August 2012 identifies such use as that of a “hotel,” which conflicts with Kapcio’s description: “private hotel.”

As part of Limelight Investments’ acquisition, Kapcio agreed to stay on, hoping to convert his “sweat equity” into ownership. With his knowledge and experience, he promised the new owners a private hotel could be fruitful.

Since the sale, Kapcio’s focus has shifted to re-establishing Seven Four One as part of the Laguna community, though it remains an oddity in a town with hotels aplenty. Kapcio’s most visible touch is the greening facelift to the hotel’s stark contemporary façade and on-premises courtyard, welcoming living wall installations by Seasons Landscaping.

Seasons Landscaping’s Scott Hutcheon, a Laguna resident, explains that the hydroponic engineered system of plants provides new visual interest with color textures and contrast.

“We want to be compliant in every possible way first [before applying for C.U.P.s],” explained Kapcio, saying changes are being made to the property as requested by city planners and that issues such as proper noise levels are being adhered to. “We want to show the city and the people of Laguna we’ll follow the rules.”

Kapcio is determined to realize the success he envisions for the private hotel. He keeps and proudly displays handwritten letters from satisfied customers in the entryway of the building and hopes to open the doors to more city-oriented events.

In December, the hotel hosted a Friends of Architecture meeting. Kapcio hopes to provide a place for fundraisers, Chamber of Commerce meetings, and even high school events.

“We’re trying to do things the right way,” he said. “We want to be good neighbors and add to this area and participate actively in the community. We hope the city is open to seeing our accomplishments so far.”